Thought Leadership

The year of critical (transparency) thinking

April 19, 2018

By Rohan Creasey

There can be no disputing that it’s been a big couple of years for “transparency” in our industry. The subject first made headlines in 2016 with the US Association of National Advertisers voting it word of the year. Since then, it has continued to dominate the ad tech narrative. Marc Pritchard of the world’s biggest advertiser, Procter & Gamble, began 2017 by making a clarion call at the IAB Leadership Summit for transparency across what it called the, “crappy media supply chain“. And in February at the 2018 Leadership Summit, Unilever’s CMO Keith Weed reiterated the need for brand marketers, agencies and technology partners to work together to establish trust at all points along the media supply chain. Clearly, in some quarters there is still much work to be done before the issue recedes. However, for those companies that have put their house in order, the continued focus on transparency offers opportunity and competitive advantage.

How to be transparent about transparency

Here are five areas I believe are critical to get on the path to real transparency.

1.Transparency in the ad request (publisher to exchange)

A publisher, media owner or app developer (I’ll call them all ‘sellers’) sends ad requests to an exchange. It’s a straightforward process, traditionally performed using a piece of code (a ‘tag’) that is triggered from within a seller’s ad server, and nowadays also common via APIs (Application Programming Interfaces) or header bidding requests from a browser, often via a ‘wrapper.’Whether it’s called a tag, an API or a wrapper, it performs the same function – it requests an ad. And it is also the first point at which transparency can get cloudy. So, for example, you should be wary of vendors who use their own wrapper solution because the only thing a wrapper needs to do is make ad requests. It should be an invisible, vanilla layer of code, treating every request equally and non-judgmentally – and it should be entirely open about its behaviour. If behaviour falls outside of this description, the wrapper is effectively making revenue decisions on your behalf, and why would you allow a third party to control revenue content on your page?

Instead, seek out sellers who use Prebid.js, a 100% free and open source header bidding wrapper that is inherently neutral, adaptable, and transparent to all industry players.

It’s pretty simple – if you plan to participate in an auction make absolutely sure you know the auction rules before you even consider participating. The rationale for this is straightforward – if you don’t know the rules upfront then your ability to win an auction or even create a bidding strategy is dramatically affected without that transparency.If the rules aren’t clear and stated in advance, then ask yourself why would a company not be upfront about the type of auction? Start by asking if the exchange is hosting seller is running a first or second price auction. Then ask what’s being charged and by whom. If you bid a dollar, how much might your exchange remove before the auction?

3. Auction

Once you have established the rules, you need to understand how the bids are handled and what decides the auction outcome. For the most part, winning bids are selected simply on the highest value for the seller, but not always. There are still questions to be asked, specifically:

Where is the decision on who wins taking place? The answer to this should be the seller ad server. The ad server has the fullest picture across a seller’s demand (e.g. direct, programmatic & in-house). External influence should not be a factor (such as owned wrapper codes which I mentioned earlier). If those wrapper codes are a factor then you should have cause for concern.

Do all campaigns have the same chance of success? In a highest-bid-wins-only auction, strategy around buyer deals may change, or even be redundant.

Is every bid equal? Have all fees been taken into consideration? Rather than gross revenue, should participants be bidding based on net revenue (i.e. without fees) to provide better parity across competitors?

It is imperative to get clear answers before you proceed.

4. Header bidding & the DSP

Header bidding has multiplied the number of bid requests received by every DSP. Some of this is welcome – its inventory they’ve not previously been able to see -but much of it is unwelcome too, like bid duplication. The infrastructure costs associated with this growth have put a huge burden on DSPs.While some DSPs are developing the technology to cope, de-duplicate and achieve transparency (and infrastructure is not cheap) many simply ignore large volumes of this newly available inventory. This is something Rubicon Project is acutely aware of. Last year, we acquired nToggle, whose integrated technology enables buyers to more effectively identify and target their key audiences. By keeping inventory for each unique DSP unclouded, buyers can see more of the impressions they want.Make sure that your DSP has a solution in play.

5. Transparency into the seller for the buyer

The final piece of the puzzle is one that is often not considered, in many cases because people aren’t aware of this potential issue.After a winning bid clears the exchange (& header) and the bid is relayed to the ad server, is there transparency into what then happens? Let’s take a preferred access deal as an example: a buyer pays an agreed rate to get special access to a piece of inventory or an audience. They win through a header bidder setup and their bid reaches the ad server.

Is the ad server setup to give this deal response the preferential treatment it deserves?

Further, is the bid going to be subject to a further auction after the ad server has made its decision? For example, this may occur where an ad exchange is integrated with the ad server.

This final layer of transparency is best handled with a conversation between buyer and seller, and education to ensure setup is correct. Make sure this conversation happens.

A rising tide

2018 should be the year that the whole digital ecosystem takes active steps to fix the issues that have overshadowed conversations for the last few years and collectively walk the talk. This means asking partners and vendors the critical questions and making sure their answers align with truly transparent practices. It is only by being open and vulnerable that we will collectively lift our industry up and move forward with confidence & integrity.